What the future of air travel might look like after the coronavirus pandemic
- Currently, most of the world's population lives in countries with coronavirus travel bans.
- The coronavirus has decimated various industries, but tourism and transportation are undoubtedly taking some of the biggest hits.
- While most agree that travel will rebound, it may look different.
- Some believe airfare could remain low for some time, and that airlines may keep the more flexible change and cancellation policies they recently adopted.
- The micro trip trend we were seeing pre-pandemic may come to an end, and could be replaced by more meaningful travel.
- For more stories go to www.BusinessInsider.co.za.
Not surprisingly, the Transportation Security Administration (TSA) estimates that air passenger volume is down 90% from this time last year.
The devastating effects on travel right now are obvious - a $2 trillion (R36 trillion) government stimulus bill (The Coronavirus Aid, Relief, and Economic Security Act) was already signed into law, providing airlines with around $60 billion (R1 trillion) in financial assistance.
But what does the future hold for air travel?
While a new report from an analyst at Stifel, an investment banking company, predicts that air travel demand will not return to pre-outbreak levels until at least mid-2021, best-case, it will rebound, as it has in the past, after the financial crisis of 2008 and 9/11 for example, two other events that had a huge negative impact on air travel.
However, things may look a little different going forward.
Business Insider spoke to a variety of travel experts, travel agents, and one futurist to find out what we can expect:
Travel will rebound
While the question of when, and how long it will take to get there remains unanswered, all of the people we spoke to agreed on one thing: travel will rebound.
"People's desire to travel is resilient," TripAdvisor said in a statement to Insider. "What we've seen through SARS, Ebola, terrorist attacks and numerous natural disasters is that the travel industry has always rebounded."
A new survey confirms this. Conducted by LuggageHero, the survey of 2,500 people shows that 58% of Americans are planning to travel between May and September 2020, as long as their destinations aren't in quarantine. That said, a quarter of participants said they will avoid big cities and public transportation, and 21% will travel domestically.
Konrad Waliszewski, CEO and co-founder of TripScout, conducted a survey of 3,000 of his users, and told Insider that "people can't wait to get back to traveling." He adds that "Travelers are taking this situation very seriously from a global health perspective, but it's not impacting their personal view on traveling internationally and the majority are actively planning their next trip."
"I think this has very little impact on the leisure traveler," he said. "I think it has a big impact on the industry. I think it can destroy the cruise industry. Airlines are going to see a huge shakeup, but I think the leisure traveler is going to travel in the exact same way."
"Humans need to travel. That is a fundamental aspect of what it is to be human," said Ross Dawson, author and futurist. While he believes the road to "normal" will be a bumpy one, filled with setbacks, he has no doubt we will get there.
In fact, most people we spoke to pointed towards a potential "cabin fever" spike in demand for travel post-pandemic, as a result of quarantine. A Harris poll taken between March 28 and 30 confirms this, showing that nearly 24% of respondents are planning on going on vacation once things return to normal.
"There's definitely a pent up desire to try to explore even more," Waliszewski said, citing his study.
"The floodgates are gonna open," Elaine Smith, a travel advisor and head of travel agency E-destinations, seconded.
Some experts expect fares to stay low as airlines struggle to get customers back on board
Scott Keyes, founder of Scott's Cheap Flights and chief flight expert says that there could be a silver lining, as he is optimistic that flight prices will remain low for quite some time.
"I think it bodes very well for airfares. I think that cheap flights are going to be way more prevalent," he said, adding that he believes we're already in "the golden age of air travel," as flight prices are comparatively lower than they have ever been.
He also expects planes to be a little less full in the near future. "And what's the easiest way for airlines to try to fill seats? Cutting fares," he said. "Surveys and polling show that the number one factor on how people decide whether or not to book a flight is price - not schedule, not airline, not amenities. So I think it's quite likely that low fares are going to be sticking around for a long while after this."
He also cites low load factors (how many people are on flights), the current low price of oil, and the recently passed CARES act (Coronavirus Aid, Relief, and Economic Security Act), which suspended taxes that we're used to paying on fares, such as airport usage fees, for the rest of 2020 with keeping prices down - though maybe not as "absurdly" low as they are right now.
Finally, he adds that the Boeing 737 MAX planes are also set to make a comeback soon, meaning that most airlines will have a lot more planes - and thus a lot more seats to fill.
Gilbert Ott, creator of God Save The Points, agrees.
"Airlines are going to have to do anything they can to get people back into the skies, whether that's a free checked bag on your first flight back or whatever," he said. "I think the offers will be really, really good."
Smith also foresees airlines, hotels, and cruises offering added benefits and perks to entice travelers.
Not all experts agree - some say fares could go up due to fewer flight options and should struggling airlines consolidate
Dawson thinks the opposite might be true.
"I think it is inevitable that, initially at least, the cost of air travel will be higher than we have become used to. And that that will be very much in the longer term of or a number of years," he said. He explains that between having losses to make up and potentially emptier planes, airlines could raise ticket prices.
According to CNN, airline executives do expect fewer flights and a decrease in demand for the foreseeable future, which would mean that they would have to employ a smaller workforce, fly certain routes less often to fill up seats, and even ground entire planes. This would mean less capacity, and, in turn, higher prices.
"Fliers will have less choice - of airlines, of flight times, and of available routes and markets. All of that means passengers will pay more when they return to the air," CNN's Chris Isidore writes.
Further, massive events that have disrupted air travel in the past, such as 9/11, have caused airlines to consolidate. There were nine major US airlines before 9/11 - after, they merged into the four big ones we know today: Delta, United, American, and Southwest.
Dawson is certain that we'll see further consolidation in the airline industry. And in a recent Business Insider article, David Slotnick cited an aviation consultancy that suggested this will be the case, writing that "many of the world's airlines could be bankrupt by May because of the COVID-19 crisis."
Competition is a key force in driving prices down, as airlines try to one-up each other. Less competition could translate into higher fares.
Keyes agrees, but is especially worried about budget airlines, such as Norwegian, suspending their long-haul international routes.
"Long-haul budget flights are a little bit trickier to turn a profit on than short-haul flights," he said. "How budget airlines think about long haul, once this is over, I think is going to be a key factor in determining what long-haul airfares look like going forward."
Domestic travel might be up, at least initially
There won't be a magical day on the calendar when the coronavirus pandemic will be done with. It will be a slow recovery that differs across the globe, meaning that travelers might have to continue to contend with various travel bans, visa rules, and lockdowns.
Keyes says it all depends on how the pandemic plays out, but says that he wouldn't be surprised if domestic travel is more popular initially because it might seem "like a less risky proposition" than going abroad.
Dawson thinks it depends on the person.
"We are emotionally scarred, and there's some people that are gung-ho and happy to launch out as soon as they can, and others who will be more cautious and wait not be the first [on planes]," said Dawson.
Business travel could plummet, which may impact fares
Most people we spoke to said that being forced to use video conferencing tools could lead individuals and companies to second-guess business travel, and the necessity of certain trips that they may have previously taken for granted.
"I think that there's potential that we will see more decisions for a long time being taken that we can use digital connection as substitutes for travel," Dawson said.
Keyes says that one of the main reasons why fares have been so cheap lately is because airlines have been generating large amounts of revenue from business travelers, which has been subsidising leisure travelers in a way.
"Airlines can make a lot more nowadays from business class, first class, even premium economy than they used to, which gives them leeway to be able to sell cheaper fares in the back," he explains. Without those travelers, the so-called back might get more expensive.
Ott says that airlines would "have to reconsider their business model entirely" if business travel dwindles. He cites as an example that Apple pays millions of dollars a year just to buy seats on the San Francisco/Shanghai route. Fast Company confirms that Apple buys 50 business class seats on that route every single day, paying United $150 million (R2.7 billion) annually.
Airlines might continue to be more flexible - at least for the near future
Jeffrey Traugot, a luxury travel advisor in Manhattan affiliated with Travel Experts, a travel agency consisting of independent travel businesses, has been in the travel industry for 26 years - including during both 9/11 and the 2008 financial crisis. He thinks airlines, cruise ships, and hotels will all adopt more lenient change and cancellation policies.
"I think they will keep these policies in place for a while until travel starts again and then they will not be as relaxed," Traugot said. "So there is a change, but I think it will be temporary," he said.
Keyes says he thinks people are getting used to these new, lenient change and cancellation policies, which only Southwest already had in place in the US pre-pandemic, but now all other airlines have adopted. He thinks that people are probably getting a lot of comfort from them, and that airlines are likely taking a close look at how these policies are affecting bookings.
"I would not be surprised if there are some changes to the sort of structure of those change and cancellation fees. That certainly didn't happen before the outbreak, and probably wouldn't have happened without it. I wouldn't be surprised if the relaxation of the change and cancellation fees lasts quite a while at least," he said.
While the Department of Transportation issued a notice to airlines on April 3 saying that they must offer refunds on canceled flights, many passengers still report having trouble getting their money back.
Hygiene and sanitation could become a priority
"I think coming out of this we are all more health-conscious," said Richard Kahn, a former travel editor and marketing executive with 50 years of experience in the travel industry. "I think that cleaning the planes, cleaning the cruise ships, cleaning the hotel rooms is going to be taken up a level to protect people."
Dawson agrees, saying "people will pay more attention to cleanliness records." He even predicts the rise of a new kind of plane class, which he somewhat jokingly refers to as an "isolation class."
Claiming that humans will now be "highly sensitised to the risk of a pandemic," he foresees airlines having to step up their precautions, whether that's testing the health of every single person at boarding, providing face masks and sanitiser, or offering various degrees of distance between people, be that with curtains or little rooms as we have seen in some airlines' first class cabins.
Travel may become more purposeful
Dawson predicts that people will be making different choices when it comes to travel, weighing whether a trip is "sufficiently compelling, in terms of family connection, in terms of just is this a place I just must be, is this is a meeting I have to go to, whatever it is."
"It is a higher threshold as to whether people will choose to make the trip, than there has been in the past," he said, anticipating that jetting off for a quick and exotic weekend will become less likely.
Ott seconds this notion, saying that micro-trips were becoming a huge trend pre-pandemic, where people flew to far-flung locales for a short amount of time simply because fares were cheap and the sharing economy, like Airbnb, was booming.
"I think for the good of the planet as a people we might consider fewer trips but longer duration," he said. "I think personally the focus will be on bigger, more meaningful trips than the kind of micro trips we were really into before."
Kahn says that he thinks people will finally go on those bucket list trips they've been planning and putting off for years, now fearing that something like this pandemic could come back around and interfere with their travels again. "I think the travel industry will come back stronger than ever," he said, "with more people traveling to places that they haven't been to."
Travel agents could make a comeback
As people around the world struggled to get out of certain countries ahead of the travel ban, or spent hours on the phone fighting to get their money back on flights they had to cancel, the pros of a human travel agent versus an online travel agency might have come into sharp focus.
Erika Ritcher, the senior director of communications for the American Society of Travel Advisers, said "I remain hopeful that the future of travel will have an emphasis on a travel advisor. Why? Because when things go wrong you have an advocate. And we have seen this play out over the past three months when people are scrambling to figure out how to get home, travel advisers are 10 steps ahead already rebooking their clients on flights home. Most of my travel advisors spent countless hours bringing Americans home."
"It'll be very challenging times, but we'll be coming back to a better future, you know, a brighter future on the other side," Dawson predicted.
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